Nigeria issues N75b in bonds

Nigeria sold N75 billion ($476.10 million) worth of five, seven and 10-year sovereign bonds maturing in 2017, 2019 and 2022 at an auction on Wednesday, with yields inching up by just more than 70 basis points.

Nigeria, sub-Saharan Africa’s second biggest bond market was included in the JP Morgan’s Government Bond Index for emerging markets (GBI-EM) on Oct.ober 1, spurring an initial rapid fall in yields in local bond as investors took positions.

The inclusion in the JP Morgan index is expected to attract about $1.5 billion in offshore investment in the local bond market, the bank says.

Nigeria sold N15 billion in the five-year bond at 13.68 per cent, compared with 12.93 per cent last month, and N30 billion apiece in the 7-year and 10-year bond at 13.74 per cent and 13.50 percent.

The seven-year bond was issued at 12.90 per cent previously, while the debt office issued the 10-year note at 15.90 per cent at the August auction, the last time it was issued.

Traders said a more than 300 basis point fall in yields last month provided an opportunity for many investors to sell, pushing yields back up.

Total subscription for the notes stood at N144.32 billion compared with N82.94 billion last month.

Africa’s second-biggest economy issues sovereign bonds monthly to support the local bond market, create a benchmark for corporate issuance and fund its budget deficit.

At the present budget and revenue levels, Nigeria has no need to borrowing either in the form of loan or bond issue.

With the state of our economy, the actual total revenue of the country is always a minimum of N12tr. The FG is always expected to share at least N6tr of this. But the FG always budget revenue of about N3.95tr. This always leaves a deficit budget for the country, which should not be the case.

The main issue is, at least N2tr of our collected revenue is not always accounted. Stop the FG from further borrowing. Account for all our revenue. Don’t steal the revenue and at the same time put the country in debts.

Remember this did not start with Jonanthan but all the previous Federal Governments. It got to stop now.

Odu Benjamin

Most Nigerians don’t understand how the economy works some believe that because we have oil we don’t need to borrow. The present administration is the best ever in terms of managing the economy, The Minister of Finance is doing her best to transform this country but ignorant men don’t know what she is doing. I don’t blame such people bicos they are naive on the performance f the economy. God bless Nigeria